By Richard Cowan
April 16 (Reuters) – U.S. Democratic Senator Elizabeth Warren on Thursday said she believes the holes in Federal Reserve chair nominee Kevin Warsh’s financial disclosures of his more than $100 million in assets do not pass muster with Senate ethics rules and add to reasons his confirmation hearing set for Tuesday should be delayed.
“This hearing should not go forward, now, until these financial disclosures are resolved, until he is in compliance with ethics rules,” the top Democrat on the Senate Banking Committee told reporters after meeting with Warsh.
Warsh’s filing, made public on Tuesday, included gaps in disclosures on assets held “due to pre-existing confidentiality agreements,” and pledges to divest them to conform with central bank ethics rules if confirmed.
Without those details, Warren said, it was not possible to understand “his entanglements,” adding Warsh was explicit that he would not hand over more documents.
“The whole point of the disclosure is not only to know about his entanglements and things, but to be able to check to see that they are unwound by the time he becomes a Fed governor,” Warren said. “The Fed has already suffered multiple ethics scandals because Fed governors have had conflicts of interest.”
Earlier on Thursday all of the Senate Banking Committee panel’s Democrats called on committee Chair Tim Scott to delay the Warsh hearing as long as the Department of Justice had open investigations into Fed Chair Jerome Powell and Fed Governor Lisa Cook, probes that both say are pretexts to pressure the Fed on interest-rate policy.
While the committee’s Democrats do not have the numbers to stop the hearing on their own, Republican Thom Tillis has said he will only vote to confirm Warsh after the DOJ ends its “frivolous” Powell probe, which Tillis also views as an attack on Fed independence. Tillis’ stance effectively blocks Warsh from Senate confirmation.
Under the central bank’s rules, Fed officials are not allowed to hold cryptocurrencies and bank stocks, among other holdings. His disclosed assets include crypto-related assets such as Tenderly, an “ethereum developer platform,” Stashfin, described as a “consumer lending neobank,” and Lemon Cash, described as a crypto financial services platform.
The Trump administration wants to get Warsh confirmed by May 15, when Fed Chair Jerome Powell’s leadership term ends. Given the extent and complexity of his holdings, divesting before that could prove challenging.
Fed ethics rules also require officials to comply with restrictions on trading and the timing of trades. Fed Governor Adriana Kugler resigned abruptly last summer after financial transactions by her spouse ran afoul of those rules.
Warren told reporters she is also concerned that Warsh’s name appeared in documents related to late convicted sex criminal Jeffrey Epstein released by the government earlier this year.
She said she had a meeting with the White House briefer on the FBI investigation and was told the FBI had not investigated Warsh’s undisclosed assets or if he had any relationship with Epstein.
(Reporting by Richard Cowan and Michael S. Derby; Writing by Ann Saphir; Editing by Chris Reese and Daniel Wallis)
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